Johannesburg - Naspers [JSE:NPN], by far the biggest share on the JSE, gained 2.29% in morning trade on Tuesday to R2 547.45, 0.75% higher than the previous best of R2 530.00 set in September last year. It reached an intra-day high of R2 558.44.
Before Tuesday’s trade Naspers was already more than 18% higher over the past month, and British American Tobacco (BAT) [JSE: BTI] and Richemont [JSE:CFR] both gained almost 9% over the same period.
The sharp drop in the value of the rand to levels of R13.90 to the dollar after President Jacob Zuma’s controversial Cabinet reshuffle on March 31 initially helped these shares, but the rand has since recovered most of these losses on the back of a weak dollar and Naspers is still rising.
The stock dropped back from a previous high of R2 530 to as low as R2 103 on March 2, when the rand firmed to R12.45/$, but has since risen 23% over the past 90 days with most of these gains over the past month after Zuma sent the markets in a tailspin.
Naspers also received continued support from the share price of Tencent, the Chinese internet giant in which the local media group holds a 34.5% stake. This interest represents most of Naspers’ income and market value. Tencent on Tuesday morning traded 1.07% higher at $30.79, just below the all-time high of $30.88 set recently.
With Naspers representing about 12% of the market’s capitalisation, this lifted the Industrial index to a 0.60% gain by mid-morning.
The rest of the market traded mostly lower with the Financial and Resources indices moderately down, but the Industrial index boost was enough to push the All-share and Top 40 indices in the black at mid-morning. At that stage the All-share index was only 0.08% higher at 52 966 points, while the Top 40 index traded 0.17% firmer at 46 264 points.
A strong performance by the FTSE index in London after the favourable result in the French election, where Naspers is also listed, obviously gave the share a push over the past two days, but dual-listed shares like Naspers, British American Tobacco and Richemont have been performing strongly over the past month although the British market was battling due to a strong pound.
It looks if investors are moving funds to companies which do most of their business abroad to escape the political uncertainty in South Africa, after the country’s junk credit downgrade.
Before Tuesday’s trade the Industrial index, which includes most of the big dual-listed shares, was already more than 6% higher over the past month and more than 9% up over the past three months.
On February 26, when the rand was on a strong run, the index traded as low as 74 090 points, compared to this morning’s level of 79 359 points. It is however still more than 4% lower than the all-time high of 82 078 points.
BAT gained 0.70% on Tuesday morning to trade at R893.25, while Richemont gained 1.66% to R107.13. As recently as February 27 Richemont was as low as R95.56, trading on a high of R110.75 earlier this month.
The Financial index lost 0.60% by mid-morning, after the top banking shares gave up most of their strong gains from Monday when the rand firmed to below R13/$.
Standard Bank [JSE:SBK] lost 2% to trade at R144.30 and FirstRand [JSE:FSR] was 1.873% lower at R48.15. Barclays Africa [JSE:BGA] lost 1.7% to R146.02. The banking group disclosed that it has granted special restricted share awards worth R191m to “retain skills critical to the group”.
The Resources index was 0.40% lower, with the Gold index losing 1.7%. The Gold index lost more than 11% of its value over the past week before Tuesday’s trade, but is still 17% higher for the month after strong gains when the rand dropped sharply on Zuma’s actions.
Anglo American [JSE:AGL] traded 1.30% lower at R185.95 and BHP Billiton [JSE:BIL] lost 1.07% to R201.20. Sibanye [JSE:SGL] continued to be the busiest share in the gold sector, losing 0.50% to R27.68. Before Tuesday’s trade the stock was already 16.8% lower over the past week.
* Fin24's parent company Media24 is part of the Naspers Group.